Commission Implementing Regulation (EU) 2024/432 of 2 February 2024 determining that the information to be automatically exchanged pursuant to the agreement signed by the competent authorities of Canada and certain Member States is equivalent to the information specified in certain provisions of Council Directive 2011/16/EU
Date: 2024-02-02
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: Canada, OECD, administrative cooperation, cloud computing, electronic commerce, exchange of information, multilateral agreement, national competent authority, tax law, tax on income








L_202400432EN.000101.fmx.xml












Official Journal of the European Union


EN
Series L













2024/432


5.2.2024







            COMMISSION IMPLEMENTING REGULATION (EU) 2024/432
of 2 February 2024
         
determining that the information to be automatically exchanged pursuant to the agreement signed by the competent authorities of Canada and certain Member States is equivalent to the information specified in certain provisions of Council Directive 2011/16/EU


THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,


Having regard to Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (1), and in particular Article 8ac(7), first subparagraph, thereof,

Whereas:







(1)


Article 8ac(7), first subparagraph of Directive 2011/16/EU provides that the Commission is, following a reasoned request by a Member State or on its own initiative, to determine whether the information that is to be automatically exchanged by the competent authorities of a Member State and a non-Union jurisdiction under an agreement between those authorities and that jurisdiction is equivalent to that specified in Section III, paragraph B, of Annex V to that Directive. Commission Implementing Regulation (EU) 2023/823 (2) lays down rules for implementing that provision of Directive 2011/16/EU.












(2)


Following a request by the competent authority of Canada on 30 June 2023, the Commission decided to determine whether the information that is required to be automatically exchanged pursuant to the Multilateral Competent Authority Agreement on automatic exchange of information on income derived through digital platforms (3) (‘DPI-MCAA’) currently signed by the competent authorities of Canada and Belgium, Bulgaria, Croatia, Cyprus, Estonia, Finland, Ireland, Latvia, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain and Sweden (‘the signatory Member States’) relates to the activities within the scope of Directive 2011/16/EU and whether it is equivalent to the information required under the reporting rules set out in that Directive.












(3)


For the purposes of the determination, the Commission assessed the relevant provisions of Canada’s Income Tax Act (4), in particular Section 162 and Part XX (‘Reporting Rules for Digital Platform Operators’) thereof, which was added by Section 78(1) of Canada’s Budget Implementation Act, 2023, No 1 (5), and which, according to Section 78(2) of that Act, will enter into force on 1 January 2024, and the DPI-MCAA currently signed by the competent authorities of Canada and the signatory Member States.












(4)


The Income Tax Act, as amended by the Budget Implementation Act, 2023, No 1, applies provisions of the Organisation for Economic Cooperation and Development (OECD) 2020 Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy (6), supplemented by the OECD 2021 Model Reporting Rules for Digital Platforms: International Exchange Framework and Optional Module for sale of goods (7).












(5)


The DPI-MCAA is an international legal framework developed by the OECD to support the annual automatic exchange of information collected under the OECD Model Rules by the residence jurisdiction of the platform operator with the jurisdictions of residence of the sellers and, with respect to transactions involving the rental of immovable property, the jurisdictions in which such immovable property is located, as determined on the basis of the due diligence procedures.












(6)


The DPI-MCAA signed by Canada and the signatory Member States requires the activation of the exchange relationship between Canada and each of the signatory Member States in accordance with Section 7 of the DPI-MCAA.












(7)


In accordance with Article 2 of Implementing Regulation (EU) 2023/823, the Commission has determined that the definitions regarding the reporting platform operator set out in the Income Tax Act, as amended by the Budget Implementation Act, 2023, No 1, and pursuant to the DPI-MCAA signed by the competent authorities of Canada and the signatory Member States are equivalent to the definitions set out in Section I, subparagraphs A(1) to A(4), of Annex V to Directive 2011/16/EU.












(8)


In accordance with Article 3 of Implementing Regulation (EU) 2023/823, the Commission has determined that the definitions regarding reportable sellers set out in the Income Tax Act, as amended by the Budget Implementation Act, 2023, No 1, and pursuant to the DPI-MCAA signed by the competent authorities of Canada and the signatory Member States are equivalent to the definitions set out in Section I, subparagraphs B(1) to B(4), C(1) and C(2), of Annex V to Directive 2011/16/EU.












(9)


In accordance with Article 4 of Implementing Regulation (EU) 2023/823, the Commission has determined that the definitions of relevant activity set out in the Income Tax Act, as amended by the Budget Implementation Act, 2023, No 1, and pursuant to the DPI-MCAA signed by the competent authorities of Canada and the signatory Member States are equivalent to the definitions set out in Section I, subparagraphs A(8), A(10), A(11) and C(9) of Annex V to Directive 2011/16/EU.












(10)


In accordance with Article 5 of Implementing Regulation (EU) 2023/823, the Commission has determined that the due diligence procedures set out in the Income Tax Act, as amended by the Budget Implementation Act, 2023, No 1, and pursuant to the DPI-MCAA signed by the competent authorities of Canada and the signatory Member States are equivalent to the due diligence procedures set out in Section II of Annex V to Directive 2011/16/EU and the definitions set out in Section I, subparagraphs C(3) to C(7), of Annex V to Directive 2011/16/EU.












(11)


In accordance with Article 6 of Implementing Regulation (EU) 2023/823, the Commission has determined that the reporting requirements set out in the Income Tax Act, as amended by the Budget Implementation Act, 2023, No 1, and pursuant to the DPI-MCAA signed by the competent authorities of Canada and the signatory Member States are equivalent to the reporting requirements set out in Section III, subparagraphs A(1), A(2), A(5), A(6) and A(7) and paragraph B of Annex V to Directive 2011/16/EU, and the definitions set out in Section I, subparagraphs C(3) to C(8), of Annex V to Directive 2011/16/EU.












(12)


In accordance with Article 7 of Implementing Regulation (EU) 2023/823, the Commission has determined that the rules and administrative procedures laid down in the Income Tax Act, as amended by the Budget Implementation Act, 2023, No 1, and pursuant to the DPI-MCAA signed by the competent authorities of Canada and the signatory Member States, to ensure the effective implementation of, and compliance with, the due diligence procedures and reporting requirements are equivalent to the provisions set out in Section IV, paragraphs A to D of Annex V to Directive 2011/16/EU.












(13)


Therefore, the information that is required to be automatically exchanged between the competent authorities of Canada and the signatory Member States pursuant to the DPI-MCAA should be deemed to be equivalent to that specified in Section III, paragraph B, of Annex V to Directive 2011/16/EU. In accordance with Article 8 of Implementing Regulation (EU) 2023/823, this determination of equivalence applies to the same agreement between the competent authorities of any other Member State and Canada.












(14)


Since Part XX of the Income Tax Act, as added by Section 78(1) of the Act, has not yet entered into force, the determination of equivalence should only apply from the date of entry into force of Part XX of the Income Tax Act.












(15)


Furthermore, the determination of equivalence should only apply provided that the exchange relationship between Canada and each of the signatory Member States is activated in accordance with Section 7 of the DPI-MCAA.












(16)


As required by Article 25(1) of Directive 2011/16/EU, all exchange of information between the competent authorities of Member States and non-Union jurisdictions pursuant to the DPI-MCAA should comply with Regulation (EU) 2016/679 of the European Parliament and of the Council (8).












(17)


The European Data Protection Supervisor was consulted in accordance with Article 42(1) of Regulation (EU) 2018/1725 of the European Parliament and of the Council (9).












(18)


The measures provided for in this Regulation are in accordance with the opinion of the Committee on administrative cooperation for taxation,





HAS ADOPTED THIS REGULATION:



Article 1

Determination of equivalence

The information that is required to be automatically exchanged pursuant to Part XX of Income Tax Act, as added by Section 78(1) of the Budget Implementation Act, 2023, No 1, and the Multilateral Competent Authority Agreement on automatic exchange of information on income derived through digital platforms (‘DPI-MCAA’) currently signed by the competent authorities of Canada and Belgium, Bulgaria, Croatia, Cyprus, Estonia, Finland, Ireland, Latvia, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain and Sweden (‘the signatory Member States’) is equivalent, within the meaning of Section I, subparagraph A(7) of Annex V to Directive 2011/16/EU, to the information specified in Section III, paragraph B, of Annex V to Directive 2011/16/EU.
The determination of equivalence shall apply provided that the following conditions are met:






(a)


Part XX of Canada’s Income Tax Act, as added by Section 78(1) of Canada’s Budget Implementation Act, 2023, No 1, and as assessed by the Commission, has entered into force;










(b)


the exchange relationship between the competent authorities of Canada and each signatory Member State has been activated in accordance with Section 7 of the DPI-MCAA.






Article 2

Entry into force

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.




This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels, 2 February 2024.


For the Commission


The President

Ursula VON DER LEYEN
            





(1)  
            OJ L 64, 11.3.2011, p. 1, ELI: http://data.europa.eu/eli/dir/2011/16/oj

(2)  Commission Implementing Regulation (EU) 2023/823 of 13 April 2023 laying down detailed rules for implementing certain provisions of Council Directive 2011/16/EU as regards the assessment and determination of equivalence of information in an agreement between the competent authorities of a Member State and a non-Union jurisdiction (OJ L 103, 18.4.2023, p. 1, ELI: http://data.europa.eu/eli/reg_impl/2023/823/oj).

(3)  The DPI-MCAA is available online at https://www.oecd.org/tax/exchange-of-tax-information/model-reporting-rules-for-digital-platforms-international-exchange-framework-and-optional-module-for-sale-of-goods.pdf

(4)  The full text of the Income Tax Act is available online at https://laws-lois.justice.gc.ca/eng/acts/I-3.3/FullText.html

(5)  The full text of the Act is available online at https://laws-lois.justice.gc.ca/eng/AnnualStatutes/2023_26/FullText.html

(6)  OECD (2020), Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy, OECD, Paris. Available online at https://www.oecd.org/tax/exchange-of-tax-information/model-rules-for-reporting-by-platform-operators-with-respect-to-sellers-in-the-sharing-and-gig-economy.pdf

(7)  OECD (2021), Model Reporting Rules for Digital Platforms: International Exchange Framework and Optional Module for Sale of Goods, OECD, Paris. Available online at https://www.oecd.org/tax/exchange-of-tax-information/model-reporting-rules-for-digital-platforms-international-exchange-framework-and-optional-module-for-sale-of-goods.pdf

(8)  Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ L 119, 4.5.2016, p. 1, ELI: http://data.europa.eu/eli/reg/2016/679/oj).

(9)  Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of natural persons with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free movement of such data and repealing Regulation (EC) No 45/2001 and Decision No 1247/2002/EC (OJ L 295, 21.11.2018, p. 39, ELI: http://data.europa.eu/eli/reg/2018/1725/oj).


ELI: http://data.europa.eu/eli/reg_impl/2024/432/oj
ISSN 1977-0677 (electronic edition)